MethylGene Announces Third Quarter 2005 Results.MONTREAL Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. -- MethylGene Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :MYG) a biopharmaceutical company, today announced operational and financial results for the third quarter ended September September: see month. 30th, 2005. Third Quarter Progress and Highlights: - Completed enrolment in one Phase I, MGCD0103 monotherapy, dose escalating trial in solid tumours and continued enrolment in three MGCD0103 monotherapy dose escalating Phase I trials in both solid and hematological tumours. - Awaiting final site approval to commence the initial MGCD0103 Phase I/II combination trial. This trial is expected to be opened for patient enrolment in November at which point details of the trial will be disclosed. - Enrolment continues in the Phase II MG98 combination trial with interferon alpha for kidney cancer. Completed enrolment for a Phase I MG98 monotherapy trial which was previously reported at ASCO in May 2005 in patients with refractory solid tumours. Issuance of a U.S. patent covering the use of MG98 for the treatment of cancer with Dacogen(TM) and Vidaza(TM), two other key demethylating agents (US 6,953,783). - Recognized revenue of $1.7 million from partnerships with Taiho Pharmaceutical and EnVivo Pharmaceuticals. - Continued progress in identifying isotypic selective HDAC inhibitors in inflammation, CNS diseases, diabetes, and fungal infections. For example, several HDAC inhibitors targeting diabetes in a diabetic animal model, have shown encouraging results when compared with a currently used anti-diabetic agent. Optimization of these molecules is ongoing. Another HDAC inhibitor when combined with ketaconazole has shown the ability to prolong life in fungal-infected mice in a dose-dependant manner when compared to treatment with ketaconazole alone. "We are encouraged by the safety, pharmacokinetic, and pharmacodynamic properties of MGCD MGCD Maximum Gapless Coverage Distance 0103 as demonstrated in our Phase I single agent dose escalating trials. We look forward to starting the first of several Phase I/II combination trials and Phase II monotherapy monotherapy /mono·ther·a·py/ (-ther´ah-pe) treatment of a condition by means of a single drug. mon·o·ther·a·py n. Treatment of a disorder with a single drug. trials with MGCD0103 in the near future with additional trials expected to begin in the coming quarters," said Mr. Donald Donald (Domnall, Domhnall, Dumhnuil, Dónall) is an anglicized version of a Scottish or Irish Gaelic personal name, containing the elements dumno "world" and val "rule", viz. "ruler of the world". Compare Dumnorix. F. Corcoran Background Corcoran. Spelling variations include: MacCorcoran, O'Corcoran,Corcorran and others. The Irish surname Corcoran is derived from the Gaelic word Corcair, now used to denote purple but formerly meaning ruddy, or 'of reddish complexion'. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of MethylGene. "In contrast to many of our competitors, our understanding and use of our HDAC HDAC Histone Deacetylase (biochemistry) HDAC Heavy Duty Air Cylinder isotypic compound libraries provides us with the opportunity to investigate HDAC inhibition inhibition In enzymology, a phenomenon in which a compound (an inhibitor), usually similar in structure to the substance on which an enzyme acts (substrate), interacts with the enzyme so that the resulting complex cannot undergo the usual reaction or cannot form the usual in non-oncology settings. Moreover, to further substantiate To establish the existence or truth of a particular fact through the use of competent evidence; to verify. For example, an Eyewitness might be called by a party to a lawsuit to substantiate that party's testimony. our specificity, we have begun to demonstrate that our HDAC inhibitors A HDAC inhibitor (HDI) is a class of drug which interferes with the function of histone deacetylase. HDAC inhibitors are being studied as a treatment for cancer[1] and neurodegenerative diseases. for cancer are only active in cancer models and not, for example, in a diabetes model, with the reverse also being observed.This further validates the potential value inherent in our library of HDAC inhibitors and medicinal chemistry Medicinal or pharmaceutical chemistry is a scientific discipline at the intersection of chemistry and pharmacology involved with designing, synthesizing and developing pharmaceutical drugs. expertise." Financial Results Total revenues for the third quarter ended September 30th were $1.7 million compared with $1.9 million for the third quarter of 2004. These revenues consist of contract revenues and license fees stemming from our partnerships with Taiho Taihō can refer to:
Eligible for refunding under the terms of a bond indenture. investment tax credits; will be sufficient to carry out research and development activities into early 2007. Upcoming Milestones: - Commence additional clinical Phase I/II and Phase II trials with MGCD0103 both as a monotherapy and in combination therapy in various tumour types. - Continue enrolment for MG98 Phase II combination trial with interferon alpha. - Goal to identify a clinical candidate for the multi-targeted kinase inhibitor program within the next 3-9 months (H1 2006). - Advance other research and preclinical programs towards the identification and selection of additional clinical candidates. - Disclose additional data for MGCD0103 clinical trials at AACR-NCI-EORTC and ASH conferences. - Continue to seek partnering and business/financial opportunities. About MethylGene MethylGene is a publicly traded biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. in cancer and infectious disease Infectious disease A pathological condition spread among biological species. Infectious diseases, although varied in their effects, are always associated with viruses, bacteria, fungi, protozoa, multicellular parasites and aberrant proteins known as prions. . Two cancer product candidates are currently in clinical trials: MGCD0103, partnered with Taiho Pharmaceutical for certain Asian countries Noun 1. Asian country - any one of the nations occupying the Asian continent Asian nation country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" , and MG98, partnered with MGI MGI Mouse Genome Informatics MGI Modular Gateway Interface MGI McKinsey Global Institute MGI Military Geographic Information MGI Marine Geological Institute MGI Policy on the Management of Government Information (Canada) Pharma Pharma may be an abbreviation for:
MGCD0103 is currently in Phase I dose-escalation monotherapy trials against solid tumours and hematological malignancies Although hematological malignancies are a form of cancer, they are generally treated by specialists in hematology, although in many hospitals oncology specialists also manage these diseases. . MG98 has entered a randomized ran·dom·ize tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es To make random in arrangement, especially in order to control the variables in an experiment. two-step Phase II combination trial with interferon alpha Interferon alpha Potent immune-defense protein; used as an anti-cancer drug. Mentioned in: Waldenström's Macroglobulinemia in metastatic Metastatic The term used to describe a secondary cancer, or one that has spread from one area of the body to another. Mentioned in: Coagulation Disorders metastatic pertaining to or of the nature of a metastasis. renal renal /re·nal/ (re´n'l) pertaining to the kidney. re·nal adj. Of or in the region of the kidneys. Renal Relating to the kidney. cell cancer. MethylGene has an exclusive license agreement with Merck & Co. for the development and commercialization of small molecule molecule (mŏl`əky  l) [New Lat.,=little mass], smallest particle of a compound that has all the chemical properties of that compound. beta-lactamase inhibitors A beta-lactamase inhibitor is a drug given in conjunction with a beta-lactam antibiotic. Although the inhibitor does not usually have significant antibiotic activity on its own,[1] to
overcome antibiotic resistance antibiotic resistance,n the ability of certain strains of microorganisms to develop resistance to antibiotics. antibiotic resistance . MethylGene has a portfolio of preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. programs for its multi-targeted kinase kinase /ki·nase/ (ki´nas) 1. a subclass of the transferases, comprising the enzymes that catalyze the transfer of a high-energy group from a donor (usually ATP) to an acceptor. 2. and histone deacetylase Histone deacetylases (HDAC) (EC number 3.5.1) are a class of enzymes that remove acetyl groups from an ε-N-acetyl lysine amino acid on a histone. Its action is opposite to that of histone acetyltransferase. (HDAC) inhibitors for both oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. and non-oncology indications, and continues to seek partnering opportunities in these areas. Please visit MethylGene's website at www.methylgene.com. Except for historical information, this news release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties,(which can be found in the Company's Annual Information Form dated December December: see month. 31, 2004, and can be found on www.sedar.com) which may cause but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.
MethylGene Inc.
Incorporated under the Quebec Companies Act
INTERIM BALANCE SHEETS
As at Unaudited
September 30, December 31,
2005 2004
$ $
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ASSETS
Current
Cash and cash equivalents 5,901,340 2,046
Short-term investments 23,241,809 41,416,717
Research and development tax credits
receivable 1,686,000 690,000
Technology Partnership Canada receivable 12,516 125,158
Accounts receivable 611,704 389,338
Other current assets 1,254,232 1,280,937
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Total current assets 32,707,601 43,904,196
Property, plant and equipment 4,480,193 3,710,392
Intangible assets 2,015,853 1,887,109
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39,203,647 49,501,697
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness - 258,388
Accounts payable and accrued liabilities 3,193,144 2,817,614
Current portion of unearned revenue 511,824 1,722,475
Current portion of lease abandonment cost 147,731 -
Current portion of obligations under capital
leases 11,509 20,229
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Total current liabilities 3,864,208 4,818,706
Unearned revenue 2,292,488 2,163,832
Lease abandonment cost 249,181 -
Obligations under capital leases - 6,527
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Total liabilities 6,405,877 6,989,065
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Shareholders' equity
Capital stock 74,370,551 74,354,535
Contributed surplus 5,196,133 4,529,999
Deficit (46,768,914) (36,371,902)
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Total shareholders' equity 32,797,770 42,512,632
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39,203,647 49,501,697
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MethylGene Inc.
INTERIM STATEMENTS OF OPERATIONS AND DEFICIT
For the periods ended Unaudited
Three-month period Nine-month period
ended September 30, ended September 30,
---------------------------------------------------------------------
2005 2004 2005 2004
$ $ $ $
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REVENUES
Contract revenues
and license fees 1,691,256 1,860,319 5,621,193 6,583,848
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EXPENSES
Research and
development 4,695,250 4,038,754 13,521,843 12,272,851
Government
assistance (353,400) (948,749) (1,038,075) (1,859,815)
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Net research and
development 4,341,850 3,090,005 12,483,768 10,413,036
General and
administrative 1,097,747 1,109,011 3,548,559 3,335,116
Interest income (211,456) (234,835) (684,036) (537,538)
Lease abandonment
cost - - 441,781 -
Amortization of
property, plant
and equipment 12,877 12,176 35,884 38,777
Bank charges and
interest 5,101 3,828 13,194 22,466
Foreign exchange
loss 341,865 596,671 179,055 220,613
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5,587,984 4,576,856 16,018,205 13,492,470
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Net loss before
income taxes (3,896,728) (2,716,537) (10,397,012) (6,908,622)
Income taxes - - - 68,170
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Net loss for the
period (3,896,728) (2,716,537) (10,397,012) (6,976,792)
Deficit,
beginning of
period (42,872,186) (29,635,945) (36,371,902) (25,375,690)
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Deficit, end of
period (46,768,914) (32,352,482) (46,768,914) (32,352,482)
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Basic and diluted
loss per share (0.18) (0.13) (0.48) (0.39)
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Weighted average
number of common
shares and
common share
equivalents 21,736,289 21,469,249 21,734,540 18,076,321
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MethylGene Inc.
INTERIM STATEMENTS OF CASH FLOWS
For the periods ended Unaudited
Three-month period Nine-month period
ended September 30, ended September 30,
---------------------------------------------------------------------
2005 2004 2005 2004
$ $ $ $
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OPERATING
ACTIVITIES
Net loss for the
period (3,896,728) (2,716,537) (10,397,012) (6,976,792)
Item not affecting
cash:
Amortization of
property, plant
and equipment 303,001 276,113 858,659 841,181
Amortization of
intangible assets 31,382 32,492 91,040 88,026
Unrealized
foreign exchange
(gain) losses (10,689) 219,035 (450) 395,517
Write-down of
patents 181 8,370 181 165,803
Loss (gain) on
disposal of
property, plant
and equipment (120) (949) (542) (949)
Warrants related
to license fees 1,350 - 3,448 -
Non-cash
compensation
expense 146,178 138,153 612,584 1,082,021
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(3,425,445) (2,043,323) (8,832,092) (4,405,193)
Changes in
non-cash working
capital balances
relating to
operations 146,394 1,027,101 (1,761,054) 2,781,492
Changes in
long-term portion
of unearned
revenues (129,306) (44,315) 173,403 (1,802,091)
Changes in
long-term portion
of lease
abandonment cost (34,290) - 249,181 -
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Cash flows related
to operating
activities (3,442,647) (1,060,537) (10,170,562) (3,425,792)
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INVESTING
ACTIVITIES
Acquisitions of
property, plant
and equipment (91,744) (131,316) (1,628,988) (791,283)
Acquisitions of
intangible assets (104,262) (103,929) (219,965) (315,170)
Purchases of
short-term
investments (15,670,450) (31,459,639) (45,554,051) (94,770,879)
Proceeds from
maturities of
short-term
investments 15,356,940 15,197,001 63,729,409 82,310,901
Proceeds from
disposition of
property, plant
and equipment 120 1,350 1,070 1,350
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Cash flows
related to
investing
activities (509,396) (16,496,533) 16,327,475 (13,565,081)
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FINANCING
ACTIVITIES
Issuance of
common shares - 1,618,780 16,016 23,011,480
Redemption of
common shares - - - (28)
Share issue costs - (559,979) - (2,624,873)
Repayment of
obligation under
capital leases (5,156) (4,864) (15,247) (14,383)
Repayment of
long-term debt - (3,289) - (9,870)
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Cash flows
related to
financing
activities (5,156) 1,050,648 769 20,362,326
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Increase
(decrease) in
cash, cash
equivalents and
bank
indebtedness (3,957,199) (16,506,422) 6,157,682 3,371,453
Cash, cash
equivalents and
bank
indebtedness,
beginning of
period 9,858,539 19,055,017 (256,342) (822,858)
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Cash and cash
equivalents, end
of period 5,901,340 2,548,595 5,901,340 2,548,595
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Cash and cash
equivalents
consist of:
Cash 1,284,533 702,595 1,284,533 702,595
Cash equivalents 4,616,807 1,846,000 4,616,807 1,846,000
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Supplemental
information
Interest paid 240 728 1,071 12,295
Income tax paid - - - 68,170
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